10. The Employment Rights Act

July 2026 is an important date in the roll out of the Employment Rights Act 2025.

From July 1, employers must put protective measures in place to defend themselves against enhanced unfair dismissal claims from employees that come into effect from January 1, 2027. 

In this podcast, the DDA speaks to Mike Markham, managing director of specialist GP HR services provider Cavell HR about the implications of the new HR rules for employers of workers, including part time and zero hours, minimum wage, locums  and volunteers.

We discuss the key changes that will come into effect from July 1 and October 1, 2026, as well as review those that were implemented in April 2026 - particularly, the enhanced employer liabilities in the sphere of sexual harrassment in the workplace. 

Listen in to avoid an HMRC-style visit from the new Fair Work Agency

In the podcast we make reference to a free Unfair Dismissal pack for GPs, including: 

• A Unfair Dismissal Compliance Checklist
• An Fair Work Agency Operator Brief
• Probationary Period Structure Map
• Probationary Period Formal Review Form
• Tribunal Risk After the ERA - Training Video
• The New 6 Month Dismissal Rules - Training Video

Download the Unfair Dismissal Pack - Google Drive

Transcript

SPEAKER_01 0:06

The Employment's Right Act, passed in mid-December 2025, is being implemented gradually through 2026 and 2027 to modernise employment protections and ensure clarity for both workers and employers. This new legislation, touted by the Starmer Labour government as one of its greatest achievements, builds on the Employment Rights Act 1996 and introduces new rights and amendments across multiple areas of employment law. Since February 2026, upgraded employment rights have begun to take effect. Major changes were introduced in April 2026, and July is also an important date in the calendar of changes relating to this new law. Today I'm speaking to Mike Markham, Managing Director of CAVL HR, which is a specialist GPHR services provider. And he's here to help us today to understand the implications of the new HR rules for employers of workers, including part-time and zero hours, minimum wage, and also volunteers. I'm Elsa Cahun, the DDA's communications officer, and this is the DDA podcast. Welcome, Mike.

SPEAKER_00 1:22

Thank you very much, Elsa. Glad to be here.

SPEAKER_01 1:25

The Employment Rights Act has started to take effect primarily since April this year. How's it settling in? What do employers and employees think have been the major hits and misses?

SPEAKER_00 1:36

So I think for employers, I feel that it's it's been a bit of a mixed bag. There's a lot that's come through for them to take on board and it's raised an awful lot of questions for them moving forward. There's an awful lot of things they need to do to change and to put these bits and pieces into place to support their staff in accordance with the law. And for that reason, it has made, from my experience, quite a lot of employers start to question why so much is coming in on board for managing staff. It's made that a lot more complicated. And it does raise the question of the value of employing people. From staff, I don't feel that really very much has changed there from their perspective. Because of course, a lot of these things that are coming in place, they won't really come into contact with it until it applies to them on some of those issues. So one of the biggest things will be around the paternity rights that came in from day one and also for the increase in statutory pay. So that will come in from day one as well. So those have been their biggest changes that have been seen.

SPEAKER_01 2:35

Okay, we're going to fast forward slightly to July because obviously it is now July and employers do have something that they need to understand. So tell us what's happening from July.

SPEAKER_00 2:47

Yeah, so to talk about July, I will quickly fast forward slightly to January because the law is changing in January around the rights to unfair dismissal. Before it was at two years, now it's going to be from six months in January. That has an impact in July because anybody you employ from the 1st of July onwards, by the time you do get to January, will have unfair dismissal rights.

SPEAKER_01 3:12

They'll have six months service that entitles them to the unfair dismissal protection.

SPEAKER_00 3:17

Correct. So that means that the obligations on employers as to what they're doing over those six months starts to really take effect and bite from the first of July. So we're talking about probationary periods, making sure you're having meetings of one-to-ones in place. That's going to be something that's going to be imperative to start from the 1st of July. It won't be something that's going to be something you can hold back until January to start putting into place because, of course, those people already have those rights by then.

SPEAKER_01 3:43

If employers want to avoid unfair dismissal challenges and the process involved in that, they need to be thinking about what they're doing now so that they've got everything in place correctly from January when employees might be starting to look at what their rights actually are.

SPEAKER_00 4:01

For most employers, from our experience, I must say that, I have found that the probationary periods can be quite a lapsed process. So it's easy for them to just go over that time frame of the six months. By the time that happens, if that employee is not the right fit for the business or hasn't shown their suitability to the role effectively, then it's much more complicated in terms of managing that process because of the unfair dismissal rates. Whereas it's much simpler to manage that if you've been doing the probationary processes processes, you should have been doing over those six months. So you can make a decision before that time frame starts to kick in. And that's why it's so, so important. The worst case scenario is that if somebody were to hire an individual from the first of July, and for whatever those reasons are, it wasn't working at that point in time, that they retain that person past that period of time and it becomes so much more complicated and difficult, and the legal thresholds start to increase from that point forward.

SPEAKER_01 5:00

So if you can name three things that employers should be doing from the first of July in terms of probation or in terms of protecting themselves from an unfair dismissal claim, what would those three things be?

SPEAKER_00 5:12

One would be to set clear objectives throughout the entirety of the six-month period. So you know exactly what you're measuring individuals against and what someone who is successful would actually be able to demonstrate against that role. The second one would be to make sure that you're having regular one-to-one meetings where you're not just doing the welfare touch points as to how people are actually fitting in, but you're actually also discussing the objectives that you set for them. The third one is to make sure that you're having both a midway review point meeting in month three and a end review meeting in month six, but before the probationary period ends. That's really important. So that individuals can know where they are halfway through as to how they're performing. And also by the time you come to the month sixth, you are actually making a decision as to what's going to happen past that probation. And it's not just something that slides naturally past the six months.

SPEAKER_01 6:06

So no surprises, in other words, make sure it's all documented and nobody gets any surprises.

SPEAKER_00 6:12

That's the same as it always should have been. But what the changes are that are coming into force is making that more rigid that employees should be doing that during that probationary period.

SPEAKER_01 6:20

Thank you for that. Very important that people understand the July challenge coming in. So let's go back to April, because that was when we saw April 2026 this year, which when we saw a whole slew of changes actually come into effect. Just summarize for us which are the most important ones of those for small employers?

SPEAKER_00 6:38

Two that I'm going to really pick up on is one around sexual harassment. This will also come back up again, by the way, in October. The laws that have changed, this has already been in place in 2024, but it's actually made it a little bit more rigid that employers should be doing everything they can to prevent sexual harassment from taking place in the workplace. And that actually leans very heavily into the requirement, probably for training for managers and staff around recognising that. I think one of the things that gets forgotten about that element in particular is that you can be vicariously liable for your staff and also people that are coming into your practice. Or if you're going out and seeing people in their homes, you are liable for how your patient and also your staff are acting with each other around sexual harassment. So that's a big one. The second one is something called the Fair Work Agency. So the Fair Work Agency came into effect from the 7th of April. Effectively, the big change around this that I think has gone under the radar is the fact that employers now don't just have the concerns around people taking tribunal claims. It's about actually being investigated and being visited by this agency. So they will tend to write to you to notify you of that. But I would say and liken it to more like an HMRC inspection, if they start to come in, they can look at things like national minimum wage. But as soon as they pull that thread, they find other things, they will go where that takes them, and that could lead to fines as well.

SPEAKER_01 8:02

I think those four initials, HMRC, are enough to strike the fear of death into most people. So the Fair Work Agency, clearly something to make sure you're compliant with.

SPEAKER_00 8:13

Absolutely. And realistically, that's exactly it, Albert. It's a compliance police kind of a process. So the key thing there is to making sure that you're auditing all the procedures that you have in place for the things that we've been discussing, your probationary periods, sexual harassment, your policies and procedures and your contracts, and making all sure that all these things are compliant and above board. And of course, national minimum wage as well.

SPEAKER_01 8:36

What sort of teeth do you expect the Fair Work Agency to have?

SPEAKER_00 8:40

So I think it's going to be kind of a watch this face on it. However, we know that the Fair Work Agency will typically write out to an employer to let them know they're looking to come and do a visit, but they can do unannounced visits as well. Typically, if they do find different bits and pieces, they can issue fines in the same way as you would potentially get a fine if you were taken to a tribunal. The premise is making sure that you are fully compliant with all those elements. As soon as you're not and you have those concerns, then obviously that's what's going to probably lead you down to the place where you don't want to be. I think the way they're going to work with this is they're probably going to target particular industries, hospitality as well as construction. And also within health and social care, I can see those being elements that could be targeted too, purely because of the way that practices work, for example, with volunteers, with casual workers, and those sorts of contracts for part-time workers over time and how that relates to their holiday pay. There's loads and loads of questions there. So I can see what they'll probably do in the same way as those fearful four letters that each of our C is they'll probably start to target particular industries and gradually over time work their way through. But it doesn't mean that people can't report something to them. And that would also merit them to probably come and have a bit more of a scrutiny and look.

SPEAKER_01 9:56

Definitely one to keep an eye on. We've got some other changes coming in, I think, in October.

SPEAKER_00 10:03

Yeah. So one of the big things with this, I would say I would liken it to going onto the football pitch and looking to play a game. And the referee knows the rules but doesn't quite know yet how he's going to apply them, is where we are at the moment. Because some of the things that are coming into place in October haven't actually been finalized and have been out of consultation by the government. And obviously they're quite busy at the moment in time with other things that are going on. So we're still waiting for things to come on from that. One of the big ones is around trade unions. So in October, we are waiting. It could be a statement that will be provided that we have to give to staff and new employees when they come on board about their rights to be able to join a trade union if they so wish to do so. I personally liken this very much to the letter that you would give to people about their entitlement to auto-enroll into a pension scheme. It'll be a very similar type of process to that, I would say, or it'd be something that would be put into their contracts of employment as well. And obviously, that's going to give rise to people potentially having an increase in membership to trade unions.

SPEAKER_01 11:03

There's a lot in this new Employment Rights Act. How well do you think small businesses have prepared are going so far?

SPEAKER_00 11:13

For the ones I've been talking to, it's a huge eye-opener, like I said before. My fear is for those that don't have that support, the other part to that is the hidden costs. So when the law changes, the government doesn't advise you of other expenses that you're suddenly going to have to consume for being able to be compliant with some of these elements. And I think that's something that's also gone on the radar. But for those organizations that don't know the extent of this, don't fully aren't fully aware of all the implications and things that they need to do, they'll be the ones that are more likely to have the tribunal claims, more likely to have other impacts and costs and exposure. It's going to mean it's more expensive for those that are unaware.

SPEAKER_01 11:55

Minimum hours, workers, zero hour contract, volunteer delivery drivers, etc. How are they affected by this new law?

SPEAKER_00 12:04

This is going to be, I think, within this industry, one of the biggest areas as well to come out of this. So volunteers, I think the misdenoma there is that because they're volunteers, they're not an employee, we don't have to do anything with them. They should still have some agreement in place that shows they're a volunteer. So they can't claim later on that they are a worker or an employee. So that's really important. The other part is the industry generally does have in the background quite a lot of casual workers. And that's going to be a huge impact from January onwards as well. As that starts to change, because if individuals have had regular working and regular hours, the obligation will be on you as an employer to not wait for them to put in a request to have that as regular hours. You will have to go forward to them and look to provide them with those regular hours. And that is regardless of whether those individuals want to work that way or don't. And that's the key distinction because I think the other thing that gets missed in that is there is an awful lot of people who work as casual workers that want to work as casual workers because it fits their lifestyle. Again, it's one of those things you can't wait until January to start to get a grip on that. You need to start looking at that now.

SPEAKER_01 13:14

And locums?

SPEAKER_00 13:15

If you are using locums, that's fine. And you're using individuals on a freelance basis. Again, we may need to make sure that there is a contract in place as a freelancer. And we need to make sure that the way those individuals are working is commensurate with that contract. So the key thing there is something called mutuality of obligation. So how much control do you have over that person will determine whether they are actually genuinely self-employed, whether they're a worker or whether they're an employee. And what tends to happen is we tend to find a lot of people take on freelancers, but they don't operate in the same way as their contract state. And there is actually quite a high level of control. And in which case we have seen people taking claims to say that actually they were employees all along and then still putting in claims for unfair dismissal because you don't apply the normal processes as you would do to an employee.

SPEAKER_01 14:09

Clearly, there's a lot to learn and there's a lot to change. We're recording this just after we've heard the Starmer's resignation. Obviously, nobody can predict the future of politics more than perhaps the next half hour. Do you think this legislation is here to stay under a new Labour leader or possibly after a general election?

SPEAKER_00 14:32

Break that down. I think under the current government, Labour government, whichever guise that takes, I can't see that being something that changes. So I think this is here to stay for the short term of that. For a general election post-that, I think again, it's so hard to say because depending, I mean, it's being apolitical in this, but depending on what happens, it may not be that we get a clear majority. And therefore you have to make compromises. And to be able to do that may mean that parts of it may change. I think employment law is always changing, it changes every year. Normally, unlike this one, every October and April. Whether it would eradicate this completely, I don't know, is the simple answer to that. I think it would depend on what type of government is in next and whether it's a majority or whether that's shared between multiple parties, basically.

SPEAKER_01 15:25

Well, the here and now is that it is here and now, particularly from July. So, what does your company offer that can help GPs and their and their uh HR teams through this maze, this new employment legislation maze?

SPEAKER_00 15:42

The first thing is you'll have a link with your podcast for some unfair dismissal pack, which is completely free. Past that, obviously, we can help and support with all of your compliance and to make sure you have those protections in place and to make sure that you are supported as an employer. I think one of the biggest things employers feel from this change is that it is very much more advantageous to employees and they're very much more exposed. So, what we try to do is try to level that playing field up a bit. So still doing the right things, but making sure that you are fully compliant and protected.

SPEAKER_01 16:15

Mike, thank you very much indeed. It's been incredibly helpful.

SPEAKER_00 16:18

Thank you very much, Alsa.